PRAIRIE LITHIUM LIMITED — Capital/Financing Update 2011

Mar 15, 2011

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ASX Code: ZYL

16 March 2011

ASX Media Release

Company Announcements Office Australian Securities Exchange Level 4 Exchange Centre 20 Bridge Street Sydney NSW 2000

ZYL Receives Firm Commitments to Complete $30 million Instititional Placement

Highlights:

• ZYL has received firm commitments from institutional investors to complete a $30M placement via a re-compliance Prospectus (Placement)

• The placement will enable ZYL to earn its 50.12% interest in the Kangwane Metallurgical Coal Project (Kangwane Project)

• The A$30 million Placement will fund the completion of the feasibility study and commercial development at the Kangwane Project

• ZYL to become solely focused on mining and accelerate its re-compliance with Chapters 1 and 2 of the ASX Listing Rules

The Directors of emerging metallurgical coal producer ZYL Limited ( ZYL or the Company ) are pleased to announce that the Company has received firm commitments for the successful completion of an institutional placement of 300 million fully paid ordinary shares ( Shares ) to raise approximately A$30 million (on a pre-consolidation basis) . The Placement was strongly supported by both existing and new institutional and sophisticated investors in Australia, Asia and Europe and closed oversubscribed.

The completion of the Placement is conditional on the issue of a re-compliance Prospectus pursuant to Chapters 1 and 2 of the ASX Listing Rules; shareholders approving the change in direction pursuant to ASX Listing Rule 11.1.3, and approval of the placement pursuant to ASX Listing Rule 7.1. A general meeting of shareholders is expected to be convened on 18 April 2011, with a Notice of Meeting to be dispatched shortly.

The Placement was priced at A$0.10 (or 10 cents) per share on a pre-consolidation basis, this represents a 17.8% discount to ZYL’s 10 day volume weighted average price to the last trading day prior to this announcement of A$0.122 per share.

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RBC Capital Markets and Patersons Securities Limited acted as Joint Lead Managers and Bookrunners to the Placement.

Use of Proceeds

The proceeds from the Placement will be used to fund:

• completion of the bankable feasibility study for the Kangwane Project, associated drilling program, an aerial geophysical survey and further preparation of the box cut to potentially extract a bulk sample from the Kangwane Project;

• ZYL’s equity contribution for capital expenditure items in connection with mine construction and development; and

• general working capital purposes.

The Company considers the significant investment from institutional investors to be an overwhelming endorsement of the Kangwane Metallurgical Coal Project and provides the necessary support for ZYL to pursue its corporate strategy of becoming a Metallurgical Coal producer in late 2012.

Acceleration of Re-compliance with Chapters 1 and 2 of the ASX Listing Rules

On 23 February 2011, ZYL announced an anticipated timetable for re-compliance with Chapters 1 and 2 of the ASX Listing Rules. ZYL is required to undertake re-compliance due to the change in nature of its business activities, resulting from the exercising of the Call Option to acquire an interest in the Kangwane Metallurgical Coal Project.

Due to the substantial size of the Placement the Company considers it appropriate and logical to accelerate the re-compliance process. The revised indicative timetable for ZYL’s re-compliance listing is displayed below:

Dispatch of Notice of Meeting	16 March 2011
Lodge prospectus for re-compliance with ASIC	14 April 2011
Cut off for lodging proxy form for General Meeting	15 April 2011
Snapshot date for eligibility to vote at the General Meeting	15 April 2011
General Meeting to approve the change of activities and other matters	18 April 2011
ASX informed of Shareholder approvals	18 April 2011
Suspension of the Company’s securities from trading on ASX at the opening of trading	18 April 2011
Prospectus Offer Closes	2 May 2011
Anticipated date the suspension of trading of Shares is lifted	9 May 2011

• These dates are indicative only and may change

The Placement is conditional on ZYL obtaining shareholder approval at an extraordinary general meeting expected to be convened on 18 April 2011. It is anticipated that allotment of Shares under the Placement

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will be on or around 2 May 2011. A Notice of Meeting will be sent to ZYL shareholders and lodged with the ASX today. This will contain all the relevant resolutions that shareholders will be required to vote upon, including the approval of the Placement. New shares issued under the Placement will rank equally with ZYL’s existing ordinary shares.

Kangwane Metallurgical Coal Project Update

The Project currently hosts a JORC-compliant resource of 114.1Mt , of which 21.4Mt is in the Measured category, with the balance being a combination of Indicated and Inferred Resources. The Company recently announced the mobilization of three (3) drill rigs at the Kangwane site; a fourth drill rig arrived on site last week, and it is expected that a resource and reserve upgrade will be announced in the coming months.

For further information regarding the Placement or the re-compliance process of the Company, please contact the Company on +61 8 9486 4036 or refer to www.zyllimited.com.au

Yours faithfully,

Dr Eric Lilford Managing Director ZYL LIMITED

Competent Persons Statement:

Information in this announcement that relates to exploration results, mineral resources or ore reserves is based on information compiled by Mr Dawie Van Wyk who is a consultant to the Company and is a member of a Recognised Overseas Professional Organisation. Mr Van Wyk has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration, Mineral Resources and Ore Reserves’. Mr Van Wyk consents to the inclusion in the presentation of the matters based on his information in the form and context in which it appears.

Important Information - Mineral Exploration Targets:

It should be noted that the reporting of conceptual exploration targets is carried out in accordance with Clause 18 of the December 2004 JORC Code which permits the reporting of exploration target size and type with strict conditions, these being stated by the Australasian Joint Ore Reserves Committee (JORC) as :

“Any such information relating to exploration targets must be expressed so that it cannot be misrepresented or misconstrued as an estimate of Mineral Resources or Ore Reserves. The terms Resource(s) or Reserve(s) must not be used in this context. Any statement referring to potential quantity and grade of the target must be expressed as ranges and must include (1) a detailed explanation of the basis for the statement, and (2) a proximate statement that the potential quantity and grade is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource on the property and that it is uncertain if further exploration will result in discovery of a Mineral Resource on the property.”

About ZYL Limited

ZYL Limited is an ASX listed coal mining and development company operating in South Africa. The Company’s key project, the Kangwane Anthracite Project, is an advanced stage high quality metallurgical coal project located in the Mpumalanga province of South Africa.

The Kangwane Project is well located in close proximity to key infrastructure and coal mining support services and presents the Company with the opportunity to take advantage of both the internal markets of South Africa and the export markets through the use of the Maputo Terminal at the Matola Port in Mozambique.

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Kangwane - Project Highlights

• Potential Production within 2 years from the commencement of the BFS – 1 year BFS and 1 year construction

• Existing JORC Compliant Resources of 114Mt including an export quality Measured resource of 21.4Mt determined by independent geologists

Coal Resource Estimate Statement (JORC Code and SAMREC Compliant)
Total Measured Coal Resource (GTIS)	21.4 Mt
Total Indicated Coal Resource (GTIS)	25.5 Mt
Total Inferred Coal Resource (GTIS)	67.2 Mt
Total JORC compliant Coal Resources at Kangwane Anthracite	114.1 Mt

• Exploration Target of 400Mt to 450Mt[1 ] at an expected calorific value range of 6,635 kcal to 6,712 kcal

• Comprehensive drilling database of 149 diamond drill holes for a total of 18,567 metres over 33km strike length

• Focus on open-cut areas to the north and south

• Coal is known to sub-crop on the western side and has been measured to dip gently at 6[o] to 7[o] to the east

• Opportunity to extend mining to an underground regime once the open-cut areas have been economically depleted

• Existing box-cut on the property to facilitate the removal of a bulk sample for metallurgical testing and marketing trials

• Project located approximately 100km from Maputo Port by direct rail link , with an existing rail siding on the property. Road, power and water all located nearby

• Coal seam widths between 4m and 6m , dipping to the East at 6[o]

• Highly experienced Management Team

• Adjacent to operating Nkomati Anthracite coal mine

• Siyanda Resources (JV / BEE partner) has extensive experience in South African coal mining, currently operating two mines and previous owners of the Koornfontein Coal Mine

1 The potential quantity and grade of the above Exploration Target is conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.